New data published shows that confidence among UK manufacturers has edged up slightly since last month yet businesses are still reluctant to take on debt finance. Economic and political uncertainty post the EU referendum weighs heavily on business owners and despite the weak pound driving international demand for UK goods, manufacturers are shying away from borrowing capital for growth.
Borrowing is static even though companies now have increased choice, flexibility and faster provision of funds than ever before. This is thanks to fintech, alternative finance platforms and government initiatives mandating banks to refer their rejected borrowers to alternative finance providers.
One industry insider has made a rallying call for a change in mindset about this important tool for growth.
Chief executive of ArchOver, Angus Dent, said “The challenges British businesses are facing range from poor consumer demand and rising costs, as well as prohibitive thinking around debt,” said the head of the peer-to-peer business lender.
“To herald stronger growth in confidence and boost the economy, we need a change in mindset. Debt is viewed as a bad word, yet the reality is, if you are a small business that needs to borrow to service more customers, you’re going to need the help.”
When company bosses realise how fintech is developing to make their experience of debt and repayments as painless as possible, more will understand that properly delivered and managed debt can be a game-changer business growth. Very few businesses’ manage to grow without external capital and this demonstrates why it is vital for governments and the industry to boost borrowing.
Dent also points out that 10 years on since the financial crash, and 35 per cent of SME loan applications are still being rejected by mainstream banks and many businesses do not know that help is available beyond the nervous banking sector.